The Rand Price of Steem and Apples

Do you like apples? Interesting how the volatility of the Rand and BTC combine. But these two should have a self regulating effect on the rand price of BTC. Why? Because BTC and Rand are both seen as risky assets. How do you like them apples?

FLIGHT TO SAFETY

So if there is a flight to safety (if North Korea does something stupid) people will move out of BTC and out of the Rand. So, Dollar price of BTC will go down and rand will get weaker. So self regulating for BTC/STEEM.

This is a simple explanation. It could also have exacerbating effect on each other. How? Well, if there is risk appetite and high optimism, as is the case now in general with Trump in the White House (all time highs of the Dow Jones), then what happens? Prices of risky assets like BTC will increase a lot.

But also the Rand may get weaker or at least not get that much stronger as you would expect (inflow into emerging markets presumably causes Rand to gain strength as demand for ZAR goes up).

RISKY ASSETS

The reason I say that(may get weaker or not as strong as expected) is because big global pension funds like CALPERS (California govt pension fund) will in that case withdraw Rand assets in favor of more risky high yield assets.

South Africa used to be the go to destination for emerging market destined money because it is liquid and was always volatile so they could play with it a little.

Also it would count as an emerging market in foreign pension fund regulation but is arguably not really an emerging market because its financial sector is so sophisticated.

But that is changing now. Debt downgrades from the ratings agencies has got us at or near junk status.

EMERGING MARKET DEBT

Not only the govt debt but also the state owned enterprises debt.

Luckily the rand has gotten less volatile recently because of increased foreign exchange regulation. So the big guys in the world even big investment banks in New York can't just manipulate our currency for their own benefit.

Have you seen the movie The Big Short? That guy short sold the housing market. He bought Credit Default Swaps. So banks can do the same with the Rand. But they don't do it as much anymore.

What do you think? How volatile is the Rand price of BTC going to be going forward? And what are your general predictions about the Rand price of BTC?

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